Look locally: HR experts advise firms amidst stricter working permit system

Foreign workers will be subject to increased scrutiny under the upgraded EP application system.

Singapore has been scrambling for foreign manpower since 2021, but things got even tougher after the city-state implemented a stricter employment pass (EP) application. Now, candidates and their employers are required to pass a point-based evaluation and higher qualifying monthly salaries.

Employers, however, need not fret so much over the possible recruitment bottlenecks from the implementation of the new EP applications, according to HR experts.

One of the key steps to avoiding hiring congestion would be to identify roles that can be filled locally 100%, Nilay Khandelwal, managing director of Michael Page Singapore, told Singapore Business Review.

“Make sure that you have a complete clear strategy on what those roles are. Ensure that, whether you're working through talent partners in the market or through your own internal talent acquisition teams, the focus should be to recruit those roles locally,” Khandelwal said.

If companies have employees with 60% to 70% of the skill sets needed for the next role they are creating, Khandelwal said it is better for them to groom their employees into these new roles, “rather than to go out and find a like for like match.”

“It also works as a retention tool in a market, which is quite hot with a number of jobs that are out there,” he added.

Overall, Khandelwal said companies need to re-evaluate their current strategies as some of their employees who are holding an EP now, may not qualify with the new criteria.

This sentiment was shared by Randstad Singapore’s Senior Director of Technology, Daljit Sall, who said that a mindset shift is necessary amongst today’s employers.

Sall added that offering higher salaries and attractive remuneration packages may be the easiest way to hire good talent, based on Randstad’s 2021 study. This, however, is “very unsustainable for companies as it increases human resources costs in the long run.”

Companies must remunerate employees based on their experience, skills, and the potential value they bring to the organisation, Sall told Singapore Business Review.

“Instead of hiring a developer at the lowest market rate possible, hiring managers should take into account the market demand for this talent and make an evaluation of whether the skills and experience fit the job requirements. If there is high market demand for developers and the job applicant has all the experience and skills that you need, then, as an employer, you should be prepared to pay competitively,” Sall added.

But for those businesses which really cannot afford to increase their hiring budgets, Sall suggested that they consider doing two things: leverage government grants or initiatives and diversify their workforce by hiring young professionals or training students from the ground up through internships and train-and-place programmes.

“In Singapore, the youth labour force participation rate stood at 41.3% in 2021, higher than the rate of around 38% in the pre-COVID-19 years of 2018 and 2019. Employers, such as NTUC, are taking action to cultivate the next crop of young talent through partnerships to place them with companies in industries such as biotechnology, healthcare, and chemical process technology,” Sall shared.

Foreign talent still needed

Whilst the stricter policy could encourage companies to source locally, rather than work with an overseas agency for blue or grey-collar jobs, Sall underscored that demand for highly-qualified and skilled foreign talent in white-collar jobs will still exist.

This is because companies will continue to “seek skilled professionals to perform complex tasks, especially in the areas of technology, smart manufacturing, research and development, professional services, and banking and financial services,” Sall said.

According to the Randstad expert, skilled expats can help train the local workforce and prepare them to meet the demands of these new and emerging job roles.

“Organisations tend to turn to global talent for reasons that lie on both ends of the spectrum. On the other hand, new tech roles involving Web3 engineering are much more challenging to fill due to the need for specialised skills. For organisations that run legacy applications, some of the skills they require are no longer applicable or widely taught and learned in Singapore, as tech professionals have upskilled in their careers,” Sall said.

“It is critical for us to not only nurture a sustainable pipeline of local talent but also continue to attract global talent who are capable of driving change and innovation to retain the business attractiveness of the city-state,” he added.

Khandelwal, for his part, said that companies still need to “strike a balance” between their local and foreign talents, especially in niche roles.